Thomson Reuters Reports Full-Year and Fourth-Quarter 2013 Results

NEW YORK, Feb. 12, 2014 /PRNewswire/ -- Thomson Reuters (TSX / NYSE: TRI) today reported results for the full year and fourth quarter ended December 31, 2013. The company achieved its 2013 Outlook, and today provided a business outlook for 2014.[1] Declines in earnings and profitability in both periods reflected previously announced charges (described below).

Revenues grew 2% for the full year and 1% for the fourth quarter, before currency

Including a $260 million charge in the fourth quarter, adjusted EBITDA was down 7% for the full year and down 32% for the fourth quarter

Including a $275 million charge in the fourth quarter, underlying operating profit was down 15% for the full year and down 50% for the fourth quarter

Full-year adjusted EPS was $1.54 vs. $1.89 in 2012 and fourth-quarter adjusted EPS was $0.21 vs. $0.54 in the prior-year period

Excluding the fourth-quarter charges, adjusted EPS was $1.83 for the full year and $0.49 for the quarter

The Board approved a $0.02 annual dividend increase to $1.32 per share; represents the 21st consecutive annual increase in the company's dividend

"I am pleased that we were able to deliver on our full-year expectations, despite a tougher than expected external environment in the fourth quarter," said James C. Smith, chief executive officer of Thomson Reuters.

"More importantly, we took significant strides to position the company to thrive in future years. Our transformation initiatives are taking hold, costs are coming out and innovation is coming forth. Specifically, the charge we announced for 2013-14 is just one necessary element of the changes we have put in place to enable us to drive growth across the enterprise," said Mr. Smith.

"While the external headwinds were stronger than anticipated at year-end, particularly in Europe and the emerging markets, I am pleased with the progress we continued to make inside the company and with our customers. I am confident this progress will accelerate in 2014."

Consolidated Financial Highlights – Full Year 2013

Twelve Months Ended December 31,

(Millions of U.S. dollars, except EPS and margins)

IFRS Financial Measures

2013

2012

Change

Revenues

$12,702

$13,132

-3%

Operating profit

$1,516

$2,570

-41%

Diluted earnings per share (EPS)

$0.16

$2.39

-93%

Cash flow from operations

$2,103

$2,658

-21%

Declines in IFRS operating profit and diluted EPS were due to previously announced charges and significantly higher prior-year gains related to divestitures, which were $829 million in 2012 versus $195 million in 2013. 2012 divestitures included the Healthcare business and 2013 divestitures included the Corporate Services business. Additionally, the company recorded $836 million in tax charges in 2013 related to the consolidation of its technology and content assets. The decline in cash flow from operations was principally due to a $500 million pension contribution in the fourth quarter of 2013.

Non-IFRS Financial Measures[2]

2013[3]

Excluding Q4 Charges[4]

2012

Change

2013

Change

Revenues from ongoing businesses

$12,543

$12,443

1%

$12,543

1%

Revenue growth before currency

2%

2%

Adjusted EBITDA

$3,070

$3,310

-7%

$3,330

1%

Adjusted EBITDA margin

24.5%

26.6%

-210bp

26.5%

-10bp

Underlying operating profit

$1,881

$2,205

-15%

$2,156

-2%

Underlying operating profit margin

15.0%

17.7%

-270bp

17.2%

-50bp

Adjusted earnings per share (EPS)

$1.54

$1.89

-19%

$1.83

-3%

Free cash flow

$1,163

$1,737

-33%

$1,690

-3%

Free cash flow from ongoing businesses

$1,098

$1,516

-28%

$1,625

7%

Consolidated Financial Highlights – Fourth Quarter 2013

Three Months Ended December 31,

(Millions of U.S. dollars, except EPS and margins)

IFRS Financial Measures

2013

2012

Change

Revenues

$3,278

$3,364

-3%

Operating profit

$213

$537

-60%

Diluted (loss) earnings per share (EPS)

($0.43)

$0.42

nm[5]

Cash flow from operations

$407

$945

-57%

The decline in IFRS operating profit and diluted EPS reflected the previously announced 2013 charges. Additionally, in the fourth quarter of 2013 the company recorded a $425 million tax charge related to the consolidation of its technology and content assets. The decline in cash flow from operations was principally due to the $500 million pension contribution in the fourth quarter of 2013.

Non-IFRS Financial Measures[2]

Excluding Q4 Charges[6]

2013

2012

Change

2013

Change

Revenues from ongoing businesses

$3,265

$3,245

1%

$3,265

1%

Revenue growth before currency

1%

1%

Adjusted EBITDA

$610

$893

-32%

$870

-3%

Adjusted EBITDA margin

18.7%

27.5%

-880bp

26.6%

-90bp

Underlying operating profit

$302

$607

-50%

$577

-5%

Underlying operating profit margin

9.2%

18.7%

-950bp

17.7%

-100bp

Adjusted earnings per share (EPS)

$0.21

$0.54

-61%

$0.49

-9%

Free cash flow

$187

$707

-74%

$714

1%

Free cash flow from ongoing businesses

$198

$661

-70%

$725

10%

Full-Year Business Segment HighlightsUnless otherwise noted, all revenue growth comparisons in this news release are before the impact of foreign currency as Thomson Reuters believes this provides the best basis to measure the performance of its business.

Financial & Risk

Revenues were down 1% (down 3% organic) as growth in the Enterprise Content, FXall, Governance, Risk & Compliance and Elektron Managed Services businesses was more than offset by weakness in other segments, primarily the Equities and Fixed Income desktop businesses.

By geography, revenues in Europe, Middle East and Africa (EMEA) were down 3%, revenues in the Americas were up 1% (down 3% organic) and revenues in Asia were down 1%.

As of January 31, 2014, billed Eikon desktops totaled approximately 119,000 and installed Eikon desktops totaled approximately 123,000 versus 76,000 and 96,000, respectively, on September 30, 2013.

EBITDA declined 14% due to lower organic revenue and fourth-quarter charges of $172 million. The margin was 21.9% compared to 24.9% in the prior year.

Operating profit declined 25% due to lower organic revenue, fourth-quarter charges of $178 million and a $32 million increase in depreciation and amortization primarily from investments made in prior periods. The margin was 12.3% compared to 15.9% in the prior year.

Revenues decreased 6% due to Equities and Fixed Income desktop cancellations throughout 2013.

Recoveries revenues were down 5%.

Investors

Revenues were flat versus the prior year. Enterprise Content revenues increased 7% helping to offset declines in other portions of the Investors business.

Marketplaces

Revenues increased 2% (down 3% organic). FXall was up 11%, reflecting strong growth in volumes and an increased user base. This was offset by a decline in FX revenues for the year in other Marketplaces businesses.

Governance, Risk & Compliance

Revenues grew 14% (10% organic) to $247 million due to strong demand for regulatory and compliance products and services.

Legal

Revenues increased 3% (down 1% organic). The decline in organic revenues was attributable to the continuing decline in US print revenues and a 10% decline in revenues from the Latin American business. Excluding US print, Legal revenues grew 5% (up slightly organic).

US Law Firm Solutions revenues were flat with strong growth in Business of Law revenues (FindLaw and Elite) offset by a 1% decline in research-related revenues.

US print revenues declined 6% as firms continued to reduce discretionary spending.

EBITDA declined 4% due to fourth-quarter charges of $37 million as well as the decline in US print and Latin American revenues. The margin was 35.6% compared to 38.2% in the prior year due to the dilutive impact of the acquisition of PLC and the decline in US print and Latin American revenues.

Revenues increased 9% (5% organic). Professional was up 10%, Corporate was up 17% (9% organic) and Knowledge Solutions was up 6% (3% organic). Government-related revenues declined 33% but were up 7% in the fourth-quarter as performance has begun to improve.

EBITDA increased 7% primarily due to increased revenue with a margin of 30.4% compared to 30.3% in the prior year.

Fourth-Quarter Business Segment HighlightsUnless otherwise noted, all revenue growth comparisons in this news release are before the impact of foreign currency as Thomson Reuters believes this provides the best basis to measure the performance of its business.

Financial & Risk

Revenues were down 2% as a result of lower transaction volumes and declining subscription revenues driven by the impact of negative net sales in 2013. Organic revenues declined 3%.

Revenues decreased 5% with growth in Elektron Managed Services more than offset by legacy desktop cancellations in Equities and Fixed Income.

Recoveries revenues were down 4%.

Investors

Revenues increased 1% versus the prior-year period. Enterprise Content revenues increased 8% and Banking & Research grew low single digit but were somewhat offset by a decline in Investment Management revenues and a slight decline in Wealth Management revenues.

Marketplaces

Revenues decreased 2% (down 4% organic). FXall growth of 9% was more than offset by a decline in desktop revenues and a decline in other foreign exchange and fixed income transaction revenue resulting from continued lower market volumes.

Governance, Risk & Compliance

Revenues grew 13% (8% organic) to $69 million from strong sales growth and continued strong demand.

Legal

Revenues increased 2% (down 2% organic). The decline in organic revenues was attributable to declines in US print revenues and in the Latin American business. Excluding US and Latin American print, Legal organic revenues grew 1%.

US Law Firm Solutions revenues grew 1% with a 9% increase in the Business of Law revenues (FindLaw and Elite) offset by a 1% decline in research-related revenues.

Small movements in the timing of revenues and expenses can impact margins in any given quarter for the Tax & Accounting business. Full-year margins are more reflective of the segment's underlying performance.

Small movements in the timing of revenues and expenses can impact margins in any given quarter for the Intellectual Property & Science business. Full-year margins are more reflective of the segment's underlying performance.

Corporate & Other (Including Reuters News)

Reuters News revenues for the full year 2013 were $331 million, up 2% from the prior year. Corporate & Other costs for the full year 2013 were $320 million, including fourth-quarter charges of $28 million, compared to $317 million in 2012.

Fourth-quarter Reuters News revenues were $86 million, unchanged from the prior-year period. Fourth-quarter Corporate & Other costs were $129 million including fourth-quarter charges of $28 million compared to $103 million in the prior-year period.

Business Outlook (Before Currency)

Thomson Reuters today issued its business outlook for 2014. The company expects:

revenues to be comparable to 2013;

adjusted EBITDA margin to range between 26% and 27%;

underlying operating profit margin to range between 17.0% and 18.0%; and

free cash flow to range between $1.3 billion and $1.5 billion in 2014.

In October 2013, the company stated that it planned to take a charge of approximately $350 million, most of which would be reflected in fourth-quarter 2013 results, with a portion reflected in 2014. The aggregate amount of the charge is now expected to be approximately $395 million, $275 million of which was incurred in 2013. The company's 2014 Outlook includes the impact of $120 million of charges expected to be incurred this year. The free cash flow Outlook for 2014 reflects the estimated impact of the charges incurred in 2013 and 2014 as well as the impact of the loss of free cash flow from disposals (approximately $375 million in aggregate). The information in this section is forward-looking and should be read in conjunction with the section below entitled "Special Note Regarding Forward-Looking Statements, Material Assumptions and Material Risks."

Dividend and Share Repurchases

The board of directors approved a $0.02 per share annualized increase in the dividend to $1.32 per share. A quarterly dividend of $0.33 per share is payable on March 17, 2014 to common shareholders of record as of February 24, 2014. This dividend increase marks the 21st consecutive annual dividend increase by the company.

In 2013, the company returned approximately $400 million to shareholders through the repurchase of approximately 10.9 million shares. Approximately $300 million of these repurchases in the fourth quarter of 2013 were part of the company's previously announced plans to repurchase up to $1 billion of its shares by the end of 2014.

Thomson Reuters

Thomson Reuters is the world's leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial and risk, legal, tax and accounting, intellectual property and science and media markets, powered by the world's most trusted news organization. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol: TRI). For more information, go to www.thomsonreuters.com.

NON-IFRS FINANCIAL MEASURES

Thomson Reuters prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).

This news release includes certain non-IFRS financial measures. Thomson Reuters uses these non-IFRS financial measures as supplemental indicators of its operating performance and financial position. These measures do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies, and should not be viewed as alternatives to measures of financial performance calculated in accordance with IFRS. Non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the appended tables.

Certain statements in this news release, including, but not limited to, statements in the "Business Outlook (Before Currency)" section and Mr. Smith's comments, are forward-looking. Forward-looking statements also include expectations regarding the 2014 charges. As a result, forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. There is no assurance that the events described in any forward-looking statement will materialize. A business outlook is provided for the purpose of presenting information about current expectations for 2014. This information may not be appropriate for other purposes. You are cautioned not to place undue reliance on forward-looking statements which reflect expectations only as of the date of this news release. Except as may be required by applicable law, Thomson Reuters disclaims any obligation to update or revise any forward-looking statements.

The company's 2014 business outlook is based on various external and internal assumptions. Economic and market assumptions include, but are not limited to, GDP growth in the countries where Thomson Reuters operates. Internal financial and operational assumptions include, but are not limited to, continuing operational improvement in the Financial & Risk business and the successful execution of the company's ongoing product release programs, globalization strategy, other growth initiatives and efficiency initiatives.

Some of the material risk factors that could cause actual results or events to differ materially from those expressed in or implied by forward-looking statements in this news release include, but are not limited to, changes in the general economy; actions of competitors; failure to develop new products, services, applications and functionalities to meet customers' needs, attract new customers or expand into new geographic markets and identify areas of higher growth; increased accessibility to free or relatively inexpensive information sources; failures or disruptions of network systems or the Internet; failure to maintain a high renewal rate for subscription-based services; dependency on third parties for data, information and other services; changes to law and regulations, including the impact of the Dodd-Frank legislation and similar financial services laws around the world; failure to adapt to recent organizational changes; failure to recruit, motivate and retain high quality management and key employees; failure to meet the challenges involved in operating globally; failure to derive fully the anticipated benefits from existing or future acquisitions, joint ventures, investments or dispositions; failure to protect the brands and reputation of Thomson Reuters; impairment of goodwill and identifiable intangible assets; inadequate protection of intellectual property rights; threat of legal actions and claims; risk of antitrust/competition-related claims or investigations; downgrading of credit ratings and adverse conditions in the credit markets; fluctuations in foreign currency exchange and interest rates; the effect of factors outside of the control of Thomson Reuters on funding obligations in respect of pension and post-retirement benefit arrangements; and actions or potential actions that could be taken by the company's principal shareholder, The Woodbridge Company Limited. These and other factors are discussed in materials that Thomson Reuters from time to time files with, or furnishes to, the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. Thomson Reuters annual and quarterly reports are also available in the "Investor Relations" section of www.thomsonreuters.com.

Thomson Reuters will webcast a discussion of its full-year and fourth-quarter 2013 results today beginning at 8:30 a.m. Eastern Standard Time (EST). You can access the webcast by visiting the "Investor Relations" section of www.thomsonreuters.com. An archive of the webcast will be available following the presentation.

[1] The company's previously communicated 2013 Outlook excluded the fourth-quarter charges from adjusted EBITDA and underlying operating profit, as well as the associated cash payments and a $500 million pension contribution. See Appendix A for the company's results including and excluding these items.

[2] These and other non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the tables appended to this news release. Additional information is provided in the explanatory footnotes to the appended tables.

[3] In 2013, adjusted EBITDA and underlying operating profit were impacted by $357 million and $372 million of charges, respectively. The company's Outlook communicated in February 2013 included approximately $100 million of these charges.

[4] Results provided on this basis are consistent with the company's 2013 Outlook.

[5] nm – not meaningful

[6] Results exclude the fourth-quarter charges from adjusted EBITDA and underlying operating profit, as well as the associated cash payments and a $500 million pension contribution from free cash flow. See Appendix A for the company's results including and excluding these items.

Thomson Reuters CorporationReconciliation of Underlying Operating Profit (5) to Adjusted EBITDA (4) by Business Segment(millions of U.S. dollars)(unaudited)

Three Months Ended

December 31, 2013

Three Months Ended

December 31, 2012 (1)

Underlying

Operating Profit

Add:

Depreciation

and

Amortization

of Computer Software**

Adjusted

EBITDA

Underlying

Operating Profit

Add:

Depreciation and Amortization of Computer Software **

Adjusted

EBITDA

Financial & Risk

$81

$163

$244

$289

$155

$444

Legal

199

73

272

259

70

329

Tax & Accounting

97

30

127

96

28

124

Intellectual Property & Science

54

21

75

66

18

84

Corporate & Other (includes Reuters News)

(129)

21

(108)

(103)

15

(88)

$302

$308

$610

$607

$286

$893

Twelve Months Ended

December 31, 2013

Twelve Months Ended

December 31, 2012 (1)

Underlying

Operating Profit

Add:

Depreciation

and

Amortization

of Computer Software**

Adjusted

EBITDA

Underlying

Operating Profit

Add:

Depreciation and Amortization of Computer Software **

Adjusted

EBITDA

Financial & Risk

$816

$641

$1,457

$1,082

$609

$1,691

Legal

903

291

1,194

967

279

1,246

Tax & Accounting

257

121

378

238

114

352

Intellectual Property & Science

225

79

304

235

68

303

Corporate & Other (includes Reuters News)

(320)

57

(263)

(317)

35

(282)

$1,881

$1,189

$3,070

$2,205

$1,105

$3,310

** excludes Other Businesses (3)

Refer to page 14 for explanation of footnotes.

Thomson Reuters CorporationReconciliation of (Loss) Earnings Attributable to Common Shareholdersto Adjusted Earnings (6)(millions of U.S. dollars, except as otherwise indicated and except for per share data)(unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2013

2012(1)

2013

2012(1)

(Loss) earnings attributable to common shareholders

($351)

$352

$137

$1,989

Adjustments to remove:

Operating profit from Other Businesses (3)

(3)

(24)

(64)

(137)

Fair value adjustments

7

15

(14)

36

Other operating gains, net

(74)

(81)

(198)

(883)

Other finance costs (income)

19

4

53

(40)

Share of post-tax earnings and impairment in equity method investments

(6) Adjusted earnings and adjusted earnings per share include dividends declared on preference shares and amortization of the tax charges associated with the consolidation of technology and content assets but exclude the pre-tax impacts of amortization of other identifiable intangible assets as well as the post-tax impacts of fair value adjustments, other operating (gains) and losses, certain impairment charges, the results of Other Businesses (see note (3) above), other finance (income) costs, Thomson Reuters share of post-tax (earnings) losses in equity method investments, discontinued operations and other items affecting comparability. Adjusted earnings per share is calculated using diluted weighted-average shares and does not represent actual earnings or loss per share attributable to shareholders.

Because Thomson Reuters reported a net loss from continuing operations under IFRS for the three months ended December 31, 2013, the weighted average number of common shares used for basic and diluted loss per share is the same, as the effect of stock options and other equity incentive awards would reduce the loss per share, and therefore be anti-dilutive. Since our non-IFRS measure "adjusted earnings" is a profit, potential common shares are included, as they lower adjusted EPS and are therefore dilutive.

The following table reconciles IFRS and non-IFRS common share information:

(weighted average common shares)

Three Months Ended

December 31, 2013

IFRS: Basic and Diluted

825,270,499

Effect of stock options and other equity incentive awards

3,355,232

Non- IFRS

828,625,731

(7) Adjustment to reflect income taxes based on estimated full-year effective tax rate. Reported earnings or loss for interim periods reflect income taxes based on the estimated effective tax rates of each of the jurisdictions in which Thomson Reuters operates. The adjustment reallocates estimated full-year income taxes between interim periods, but has no effect on full-year income taxes.

(8) Reflects amortization of the tax charges associated with the consolidation of the ownership and management of technology and content assets. For the non-IFRS measure, the majority of the charges are amortized over seven years, the period over which the tax is expected to be paid.

(9) Free cash flow is net cash provided by operating activities less capital expenditures, other investing activities and dividends paid on the company's preference shares. Other Businesses (see note (3) above) are also removed to arrive at free cash flow from ongoing businesses.

Thomson Reuters CorporationConsolidated Income Statement(millions of U.S. dollars, except per share data)(unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2013

2012 (1)

2013

2012 (1)

Revenues

$3,278

$3,364

$12,702

$13,132

Operating expenses

(2,672)

(2,461)

(9,554)

(9,710)

Depreciation

(106)

(105)

(416)

(425)

Amortization of computer software

(202)

(182)

(773)

(691)

Amortization of other identifiable intangible assets

(159)

(160)

(641)

(619)

Other operating gains, net

74

81

198

883

Operating profit

213

537

1,516

2,570

Finance costs, net:

Net interest expense

(112)

(111)

(460)

(453)

Other finance (costs) income

(19)

(4)

(53)

40

Income before tax and equity method investments

82

422

1,003

2,157

Share of post-tax earnings and impairment in equity method investments

(4)

(14)

20

9

Tax expense

(425)

(43)

(848)

(126)

(Loss) earnings from continuing operations

(347)

365

175

2,040

Earnings from discontinued operations, net of tax

4

3

10

2

Net (loss) earnings

($343)

$368

$185

$2,042

(Loss) earnings attributable to:

Common shareholders

(351)

352

137

1,989

Non-controlling interests

8

16

48

53

Basic (loss) earnings per share

($0.43)

$0.42

$0.16

$2.40

Diluted (loss) earnings per share

($0.43)

$0.42

$0.16

$2.39

Basic weighted-average common shares

825,270,499

827,175,200

828,235,931

827,640,398

Diluted weighted-average common shares

825,270,499

829,180,975

830,984,677

829,603,780

(1) Prior-period amounts have been revised to reflect the retrospective application of amendments to IAS 19, Employee Benefits and the adoption of IFRS 11, Joint Arrangements.

Thomson Reuters CorporationConsolidated Statement of Financial Position(millions of U.S. dollars)(unaudited)

December 31,

December 31,

2013

2012 (1)

Assets

Cash and cash equivalents

$1,316

$1,283

Trade and other receivables

1,751

1,818

Other financial assets

183

72

Prepaid expenses and other current assets

650

638

Current assets excluding assets held for sale

3,900

3,811

Assets held for sale

-

302

Current assets

3,900

4,113

Computer hardware and other property, net

1,291

1,416

Computer software, net

1,622

1,659

Other identifiable intangible assets, net

7,890

8,134

Goodwill

16,871

16,251

Other financial assets

192

355

Other non-current assets

583

559

Deferred tax

90

50

Total assets

$32,439

$32,537

Liabilities and equity

Liabilities

Current indebtedness

$596

$1,008

Payables, accruals and provisions

2,624

2,612

Deferred revenue

1,348

1,222

Other financial liabilities

193

95

Current liabilities excluding liabilities associated with assets held for sale

4,761

4,937

Liabilities associated with assets held for sale

-

35

Current liabilities

4,761

4,972

Long-term indebtedness

7,470

6,223

Provisions and other non-current liabilities

1,759

2,502

Other financial liabilities

102

37

Deferred tax

1,917

1,305

Total liabilities

16,009

15,039

Equity

Capital

10,347

10,371

Retained earnings

7,303

8,311

Accumulated other comprehensive loss

(1,614)

(1,537)

Total shareholders' equity

16,036

17,145

Non-controlling interests

394

353

Total equity

16,430

17,498

Total liabilities and equity

$32,439

$32,537

(1) Prior-period amounts have been revised to reflect the retrospective application of amendments to IAS 19, Employee Benefits and the adoption of IFRS 11, Joint Arrangements.

Thomson Reuters CorporationConsolidated Statement of Cash Flow(millions of U.S. dollars)(unaudited)

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2013

2012(1)

2013

2012(1)

Cash provided by (used in):

Operating activities

Net (loss) earnings

($343)

$368

$185

$2,042

Adjustments for:

Depreciation

106

105

416

425

Amortization of computer software

202

182

773

691

Amortization of other identifiable intangible assets

159

160

641

619

Net gains on disposals of businesses and investments

(38)

(14)

(195)

(829)

Deferred tax

138

90

434

(149)

Other

77

-

289

18

Pension contributions

(500)

-

(500)

-

Changes in working capital and other items

606

54

60

(159)

Net cash provided by operating activities

407

945

2,103

2,658

Investing activities

Acquisitions, net of cash acquired

(254)

(26)

(1,241)

(1,301)

Proceeds from disposals of businesses and investments, net of taxes paid

195

94

550

1,901

Capital expenditures, less proceeds from disposals

(253)

(249)

(1,004)

(964)

Other investing activities

34

12

67

46

Investing cash flows from continuing operations

(278)

(169)

(1,628)

(318)

Investing cash flows from discontinued operations

(4)

-

6

90

Net cash used in investing activities

(282)

(169)

(1,622)

(228)

Financing activities

Proceeds from debt

1,974

-

3,268

-

Repayments of debt

(800)

-

(2,240)

(2)

Net (repayments) borrowings under short-term loan facilities

(5)

1

(3)

(422)

Repurchases of common shares

(300)

-

(400)

(168)

Dividends paid on preference shares

(1)

(1)

(3)

(3)

Dividends paid on common shares

(260)

(255)

(1,038)

(1,021)

Other financing activities

(23)

13

(19)

65

Net cash provided by (used in) financing activities

585

(242)

(435)

(1,551)

Translation adjustments on cash and cash equivalents

(1)

(2)

(13)

-

Increase in cash and cash equivalents

709

532

33

879

Cash and cash equivalents at beginning of period

607

751

1,283

404

Cash and cash equivalents at end of period

$1,316

$1,283

$1,316

$1,283

(1) Prior-period amounts have been revised to reflect the retrospective application of amendments to IAS 19, Employee Benefits and the adoption of IFRS 11, Joint Arrangements.

Appendix A

The following supplemental information is provided to facilitate comparison to our 2013 business outlook, which excluded previously announced fourth-quarter charges and a $500 million pension contribution(1).

b. Cash payments in 2013 associated with these charges which impacted free cash flow by $27 million; and

c. A $500 million pension contribution which impacted free cash flow.

(2) These and other non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the tables appended to this news release. Additional information is provided in the explanatory footnotes on page 14.

(3) Based on 2013 actual non-IFRS results excluding the previously announced fourth-quarter charges and pension contribution.

Appendix A

The following supplemental information is provided to facilitate comparison to our 2013 business outlook, which excluded previously announced fourth-quarter charges(1).

Thomson Reuters Corporation Business Segment Information(millions of U.S. dollars)(unaudited)

Three Months Ended December 31,

Change

Revenues

2013(2)

2012(2)

Total

Before

Currency

Organic

Trading

$622

$660

-6%

-5%

-5%

Investors

540

538

0%

1%

1%

Marketplaces

442

455

-3%

-2%

-4%

Governance, Risk & Compliance

69

61

13%

13%

8%

Financial & Risk

1,673

1,714

-2%

-2%

-3%

Legal

868

858

1%

2%

-2%

Tax & Accounting

368

339

9%

11%

7%

Intellectual Property & Science

275

250

10%

11%

9%

Corporate & Other (includes Reuters News)

86

87

-1%

0%

0%

Eliminations

(5)

(3)

Revenues from ongoing

businesses

3,265

3,245

1%

1%

-1%

Other Businesses

13

119

Revenues

$3,278

$3,364

-3%

Margin

Adjusted EBITDA

2013

Actual (2)

Remove Charge

2013

Excluding

Charge

2012 (2)

Change

Total (3)

2013(3)

2012

Change(3)

Financial & Risk

$244

$172

$416

$444

-6%

24.9%

25.9%

-100bp

Legal

272

37

309

329

-6%

35.6%

38.3%

-270bp

Tax & Accounting

127

9

136

124

10%

37.0%

36.6%

40bp

Intellectual Property & Science

75

23

98

84

17%

35.6%

33.6%

200bp

Corporate & Other (includes Reuters News)

(108)

19

(89)

(88)

Adjusted EBITDA

$610

$260

$870

$893

-3%

26.6%

27.5%

-90bp

Underlying Operating Profit

Financial & Risk

$81

$178

$259

$289

-10%

15.5%

16.9%

-140bp

Legal

199

37

236

259

-9%

27.2%

30.2%

-300bp

Tax & Accounting

97

9

106

96

10%

28.8%

28.3%

50bp

Intellectual Property & Science

54

23

77

66

17%

28.0%

26.4%

160bp

Corporate & Other (includes Reuters News)

(129)

28

(101)

(103)

Underlying operating profit

$302

$275

$577

$607

-5%

17.7%

18.7%

-100bp

(1) In this appendix, the previously announced items of fourth-quarter charges of $260 million and $275 million, which impacted adjusted EBITDA and underlying operating profit, respectively, are added back to the company's 2013 actual non-IFRS results to facilitate comparison to our 2013 business outlook.

(2) These and other non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the tables appended to this news release. Additional information is provided in the explanatory footnotes on page 14.

(3) Based on 2013 actual non-IFRS results excluding the previously announced fourth-quarter charges.

Appendix A

The following supplemental information is provided to facilitate comparison to our 2013 business outlook, which excluded previously announced fourth-quarter charges(1).

Thomson Reuters Corporation Business Segment Information(millions of U.S. dollars)(unaudited)

Twelve Months Ended December 31,

Change

Revenues

2013(2)

2012(2)

Total

Before

Currency

Organic

Trading

$2,480

$2,645

-6%

-6%

-6%

Investors

2,142

2,168

-1%

0%

-1%

Marketplaces

1,779

1,770

1%

2%

-3%

Governance, Risk & Compliance

247

219

13%

14%

10%

Financial & Risk

6,648

6,802

-2%

-1%

-3%

Legal

3,351

3,266

3%

3%

-1%

Tax & Accounting

1,243

1,161

7%

9%

5%

Intellectual Property & Science

982

894

10%

11%

4%

Corporate & Other (includes Reuters News)

331

331

0%

2%

2%

Eliminations

(12)

(11)

Revenues from ongoing businesses

12,543

12,443

1%

2%

-1%

Other Businesses

159

689

Revenues

$12,702

$13,132

-3%

Margin (3)

Adjusted EBITDA

2013

Actual (2)

Remove Charge

2013

Excluding

Charge

2012 (2)

Change

Total (3)

2013(3)

2012

Change(3)

Financial & Risk

$1,457

$172

$1,629

$1,691

-4%

24.5%

24.9%

-40bp

Legal

1,194

37

1,231

1,246

-1%

36.7%

38.2%

-150bp

Tax & Accounting

378

9

387

352

10%

31.1%

30.3%

80bp

Intellectual Property & Science

304

23

327

303

8%

33.3%

33.9%

-60bp

Corporate & Other (includes Reuters News)

(263)

19

(244)

(282)

Adjusted EBITDA

$3,070

$260

$3,330

$3,310

1%

26.5%

26.6%

-10bp

Underlying Operating Profit

Financial & Risk

$816

$178

$994

$1,082

-8%

15.0%

15.9%

-90bp

Legal

903

37

940

967

-3%

28.1%

29.6%

-150bp

Tax & Accounting

257

9

266

238

12%

21.4%

20.5%

90bp

Intellectual Property & Science

225

23

248

235

6%

25.3%

26.3%

-100bp

Corporate & Other (includes Reuters News)

(320)

28

(292)

(317)

Underlying operating profit

$1,881

$275

$2,156

$2,205

-2%

17.2%

17.7%

-50bp

(1) In this appendix, the previously announced items of fourth-quarter charges of $260 million and $275 million, which impacted adjusted EBITDA and underlying operating profit, respectively, are added back to the company's 2013 actual non-IFRS results to facilitate comparison to our 2013 business outlook.

(2) These and other non-IFRS financial measures are defined and reconciled to the most directly comparable IFRS measures in the tables appended to this news release. Additional information is provided in the explanatory footnotes on page 14.

(3) Based on 2013 actual non-IFRS results excluding the previously announced fourth-quarter charges.